The ultimate bearing capacity and failure mechanism of square footings resting on a sand layer over clay soil have been investigated numerically by performing a series of three-dimensional non-linear finite element analyses. The parameters investigated are the thickness of upper sand layer, strength of sand, undrained shear strength of lower clay and surcharge effect. The results obtained from finite element analyses were compared with those from previous design methods based on limit equilibrium approach. The results proved that the parameters investigated had considerable effect on the ultimate bearing capacity and failure mechanism occurring. It was also shown that the thickness of upper sand layer, the undrained shear strength of lower clay and the strength of sand are the most important parameters affecting the type of failure will occur. The value of the ultimate bearing capacity could be significantly different depending on the limit equilibrium method used.